The invention of the computer and the development of the Internet has ushered in an era frequently referred to as the “Information Age” in which information is traded as a commodity and used in ways previously unimaginable. The low cost for storage and transmission of data means that all of the details of numerous daily transactions can be recorded and subsequently analyzed.
One area in which data is created and stored on a large scale is in the financial arena. The tremendous volume of financial transactions necessitates automated inspection of transaction records, both to comply with legal requirements and to identify probable illicit behavior. Simple monitoring of transfer activities is not sufficient and specific tests and combinations of tests can be required to provide an indication of the possibility of illicit or questionable activities.
Fixed income securities trading represents one portion of the financial transaction market in which trading violations may occur. The Securities and Exchange Commission (SEC) regulates the fixed income security trading market. However, the complexity of the transactions in the market makes it difficult for previous systems to identify violations that occur across a number of transactions. Trading compliance violations undermine the integrity of the fixed income security market. The identification of such violations would bolster investors' security in trading in the fixed income security trading market.
Currently no system exists for automatically detecting or providing alerts about potential violations in the fixed income securities market. No previous system could examine the vast amount of data created by the trading of fixed income securities every day to determine if a trading violation had occurred across multiple transactions.
What is needed is a system and method for automatically detecting trading compliance violations in the fixed income securities market.
A further need exists for a system and method for providing alerts about trading compliance violations in the fixed income securities market to ensure the integrity of the market.